Oak Ridge utility rates going up

Oak Ridge residents will soon be finding higher electric bills in the mail … and will likely be paying higher water and sewer bills by the start of the year.

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By Donna Smith/The Oak Ridger

Oakridger - Oak Ridge, TN

By Donna Smith/The Oak Ridger

Posted Sep. 11, 2013 at 6:33 PM

By Donna Smith/The Oak Ridger

Posted Sep. 11, 2013 at 6:33 PM

Oak Ridge residents will soon be finding higher electric bills in the mail … and will likely be paying higher water and sewer bills by the start of the year.

On Monday night, City Council approved a resolution that effectively increases electricity rates by 2.63 percent — a 1.5 percent increase from power supplier TVA and a 1.13 percent inflationary increase for the city.

The increase will become effective with the Oct. 1 billings, according to information provided by Janice McGinnis, city finance officer.

The average residential household will pay an additional $3.60 a month, while the average small commercial customer will pay an additional $5.33, according to McGinnis.

However, electric rates will continue to fluctuate monthly due to the monthly fuel cost adjustment factor, which is calculated every month by TVA as fuel costs and the cost of power TVA buys from other suppliers rises and falls.

The increase in water and sewer (wastewater) rates was OK’d Monday on first reading by a 6-1 vote, with Council member Trina Baughn voting against the increases. The increase will have to be approved on second reading at its next official meeting before the increased rates are adopted.

According to information presented by McGinnis, the minimum bill for a residential user will go up $1.35 per month in January, $1.19 per month in January 2015.

For sewer rates, a 15 percent increase will go into effect Jan. 1 and another 10 percent increase on Jan. 1, 2015. The minimum bill for a residential user will go up $2.78 in January, an additional $2.13 per month in January 2015.

The water rate hike will fund initial phases of $14.65 million in capital improvements to the Water Treatment Plant, with the U.S. Department of Energy funding half of the cost.

However, the sewer or wastewater rates will fund debt service for money borrowed to pay for capital improvements to the city’s aging sewer system. The Environmental Protection Agency has ordered that the city complete these renovations by September 2015.

The money from customers’ bills will also pay for operation, maintenance and capital costs for the water and sewer systems.

“We’re a residential town,” said City Manager Mark Watson, explaining that since there are no large water and sewer customers in the city, the 29,000 residents have to bear the financial brunt of paying for improvements and maintenance to the more than 248 miles of water lines and 261 miles of sewer lines, along with the pumping systems and treatment plants.

Residents Mike Mehaffey and Andrew Howe spoke out in regards to the water and sewer rate increases, with Mehaffey calling it a “criminal” action against people in the city who earn little and Howe asking for a lower minimum rate for people such as singles who don’t use as much water.

Page 2 of 2 - “I do know people for whom every dollar is a stretch,” Council member Anne Garcia Garland said. She said they’d be looking to volunteer organizations to help people for whom the food or utilities choice must be made.

With the increases, said Council member Baughn, the Council is going to completely ruin the chances of attracting more businesses to the city. She said she couldn’t support “sticking it” to ratepayers and that Council needs to direct city staff to look at inefficiencies in government.

Several Council members said the city had done a disservice in years past by trying to not raise property taxes and utility rates and now that they are having to do it, the increases are large ones.

The last time water and sewer rates were increased was January of this year.